Courts clash over California HSR

A California appeals court has put on hold an earlier legal order by a Superior Court judge halting funding of California's high speed rail project, saying it will review the matter over funding.

The appeals court decision, made Friday, Feb. 14, 2014, stays the lower court's decision to bar the issuance of any state bonds to pay for the 700-mile project's first phase in the Central Valley. That ban would have forced the California High Speed Rail Association (CHSRA) to rely on federal funds, at least initially, which are unlikely to be replenished due to hostility within the House of Representatives to support the HSR effort. (The House provided no federal funding for HSR programs in the fiscal year 2014 budget, passed earlier this month.)

The decision by the 3rd District Court of Appeal does not reverse the lower court decision, but it could give rail officials some hope that they can escape a legal situation that could jeopardize the project. The Appeals said it was granting CHSRA's request for a fast-track review of a decision by Sacramento County Superior Court Judge Michael Kenny, which found that state had violated safeguards established in a 2008 bond act and did not have the right to issue any more bonds.

A second decision by Kenny found that the state failed to follow proper procedures in issuing the bonds and that ruling will also be reviewed by the appeals court.

The state needs to soon issue bonds to fund construction of the first 130 miles of the system, which will cost an estimated $6 billion. Construction is supposed to start by July. The state is relying on portions of $3.2 billion in federal grants, but must begin using some of its own funds by April.